Commentary

41% of Active Mobile Payments Users See High Risk in Privacy, Security

by Chuck Martin , Staff Writer, October 3, 2014

While many consumers will be faced with the capability of making mobile payments, some insights into future behavior may be gained from those already active.

Merchants, banks and the multitude of payment entities have their work cut out for them in converting not-yet users, based on a new survey.

It turns out that active mobile payment users are more concerned both about making online purchases and security, according to the survey conducted by the Kurt Salmon global financial services practice.

More than a third (37%) of active users say making an online purchase via a smartphone is not safe, compared to one in five (21%) of all consumers. More active users (41%) than non-active mobile payment users (27%) consider their privacy to be at high risk when making a mobile payment.

While more than a third (37%) of consumers rely on their smartphones to manage every part of their lives, that number shoots up to 68% among active mobile payment users.

An interesting tidbit in the survey is the amount of time it takes to make a payment. At quick-serve restaurants, cash took the longest, at 15 seconds, compared to four seconds either by credit card or mobile payment.

Consistent with other studies, this survey found that deals matter, and they matter more for active users (61%) than for non-active users (24%).

Compared to the same survey conducted in 2012, trading information for lower prices stayed about the same at just over 10% while a fourth (27%) of active users would share as many details of their personal information as required to get a lower price.

We can expect a flood of mobile payment studies to be coming out as all eyes are on Apple Pay and other new entrants, as I wrote about here yesterday (Mobile Payments & the Battle of 2 Ways to Pay).

Most interesting to watch will be the potential evolution of behaviors after people start paying by phone.

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mcommerce, mobile, mobile payments, research

2 comments about "41% of Active Mobile Payments Users See High Risk in Privacy, Security".

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Trung Ho from ASU, October 3, 2014 at 8:57 p.m.
I think besides high risk in privacy and security of using mobile payment, there are some benefit as following. First, a cash-only business such as a farmers’ market or a food truck, are unable to accept credit card payments. This often decreases sales because customers without enough cash on hand will not be unable to buy their products. So when a cash-only business can start to accept credit card payments through a mobile payment program, they immediately increase their customer base and increases sales. Second, small businesses who are using mobile payments can now track what product and services they are selling to understand customer demands. They do not only capture payment information, but they can learn about their customers and use that information to improve service. Third benefit is that using mobile payment increases speed of checking customers out. Customers always like quick service, especially when they want to pay for something. It would be quicker to pay with a mobile device than a credit card. Customers typically are more willing to return if they do not have to wait a long time in line. The time savings can be used to increase profits by serving more customers in the same period of time, especially for businesses with a very busy period during the day, such as restaurant. Fourth, small businesses can save money on credit card fees. Some mobile payment provider charge less per transaction than credit card companies.
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Paula Lynn from Who Else Unlimited, November 8, 2014 at 11:20 a.m.

How long does it take to fix your identity and credit info ? Penny-wise - dollar foolish. Be Prepared.